Great Graphic: G3 Bond Yields--One Global Capital Market

The rise of US Treasury and Japanese government bond yields has captured the imagination and focused the attention of investors. The rise in yields have knock on effects on bank's, which are significant owners of sovereign bonds. Unrealized gains get pared and the capital levels are eroded. This Great Graphic, created on Bloomberg, shows 10-year yields in the US (white), Japan (green) and Japan (yellow) over the past six months. Although German bunds have fared best, and yields remain well below the year's peak, they were actually the worst performer this week, a volatile week. The 10-year bund yield is up 6 bp this week, compared with 4 in the US, while the JGB yield was off 1.5 basis points. Over the past month, US Treasury's have been the worst performer in terms of absolute increase in yield. The yield on the US 10-year note rose 30 bp over the past month compared with 24 bp in Japan and 20 bp in Germany. Over the past three months, Japan has been the worst performer. The 10-year JGB yield is up a little more 10 bp. The US yield is up 4 bp. The 10-year bund yield is 14 bp lower. In the past six months, the US takes the "lead", with a 31 bp rise in the 10-year yield. Germany is flat and the 10-year JGB yield is up almost 10 bp.